Physical server 2008 R2 backup restore to ESX VM.

You'll be fighting the restore quite a bit due to driver issues

You can stand up a new vm and restore data or use imaging software such as backup exec system recovery or acronis true image. Both software apps will image a server and restore to either dissimar physical hardware or into a virtual easily because the wipe the Hal. Using VMWAre converter you can import the image into esxi easily ad well

did you use VMware converter at all in this process?  It can import from a few different backup types and if the controller needs to be changed, then it will make the changes to the registry and inject the drivers.

If you want to succeed with the procedure you have followed, backup and restore to the VM.

You will have to inject the LSI Drivers manually into Windows 2008 installation, which involves changes to the registry and copying the LSI drivers to the installation via a BartPE/WinPE CDROM.

VMware Converter which has been suggested is easier.

Yes, I have successfully P2V with VMware converter and Vizioncore vConverter, but for DR I want to be able to take this USB drive with the backups offsite to recover. This server is a beast, takes about 15hrs for a P2V and 3hrs for windows backup, so I would like to figure this out using the windows backup. Any instructions available on how to go about injecting the LSI drivers, changing the registry and copying the LSI drivers to the installation?

Try symantec backup exec system recovery or acronis to image, it's much faster than P2V and you can use vconverter to convert back to a VM at the DR site.

Have you thought about replication such as vizioncore's vreplicator?

Thanks for the info